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Daughter #2 is interested in this school. Can she handle it, though?

Banks Gone Wild - Krugman deconstructed

Banks Gone Wild - New York Times:

“What were they smoking?” asks the cover of the current issue of Fortune magazine. Underneath the headline are photos of recently deposed Wall Street titans, captioned with the staggering sums they managed to lose.

The answer, of course, is that they were high on the usual drug — greed. And they were encouraged to make socially destructive decisions by a system of executive compensation that should have been reformed after the Enron and WorldCom scandals, but wasn’t.

So opens former Enron advisor Paul Krugman's column, a study in how not to persuade. Krugman buries his good ideas under a layer of over-simplification, asides, and self-congratulation.

Over-simplification
"The answer, of course, is that they were high on the usual drug — greed." The answer. The one, single answer. The only possible answer. The alpha and the omega. As soon as I read the sentence, I feel Krugman trying to be too sweeping. He seems to be implying that the answer is to abolish greed, which is as likely to work as abolishing selfishness, hunger, or self-aggrandizement by newspaper columnists.

Self-congratulation
Krugman writes:

In a direct sense, the carnage on Wall Street is all about the great housing slump.

This slump was both predictable and predicted. “These days,” I wrote in August 2005, “Americans make a living selling each other houses, paid for with money borrowed from the Chinese. Somehow, that doesn’t seem like a sustainable lifestyle.” It wasn’t.

Whee - Krugman works in his own brilliance. So how does this expand my understanding of the current situation? It doesn't feel like it does - rather it seems like a gratuitous bit of self-love. More persuasive would have been for the author to show us the external signs of doom that the fools didn't see. Because he doesn't offer that, Krugman seems to be saying that the only way to avoid future disaster is for everyone to listen to him - hubristic, especially coming from a former Enron advisor.

Asides
In fact, the entire sub-prime mortgage debacle is tangential to Krugman's real point - that corporate titans who make bad calls don't pay for it. This is a great point and deserves serious treatment, which Krugman fails to give. It's also a point that transcends the current crisis. Dwelling overmuch on subprime lending obscures that more universal point.

When he makes a good point - for example:

...[T]here’s a pervasive loss of trust, which is like sand thrown in the gears of the financial system. The crisis of confidence is plainly visible in the market data: there’s an almost unprecedented spread between the very low interest rates investors are willing to accept on U.S. government debt ... and the much higher interest rates at which banks are willing to lend to each other.

...it's easy to overlook because of the chaff. Yet it's a great point, and he quickly backs it up, not by quoting himself predicting it, but by offering us a look at "the market data" - score one for the otherwise slumbering economist trapped deep inside Krugman.

And finally, he gives the market the finger by suggesting that the way to fix the underlying problem - that "[t]he huge rewards executives receive if they can fake success are what led to the great corporate scandals of a few years back" - is some sort of vague "political" solution.

Right. Campaign finance legislation has been profoundly ineffective at driving the money out of politics, so we should do what - copy that failure and try to legislate away greed? Krugman, having filled the column with fluff, can't or won't say. The only strong conclusion he even implies is that there is no market based solution. A curious conclusion for an economist, but par for the course for a former economist turned emotion-based, second-rate political hack.

Dear Mr. Krugman, please raise the bar on yourself. This column is beneath your abilities.

TIME Magazine's Loaded Language

Shooting Deer for the Homeless contains heavily loaded language - so biased it might as well be an editorial. Here's an analysis of the first part of the opening paragraph.

"Hunting may seem a cruel and heartless activity to animal-rights activists and many Americans. But hunters are trying to show they can be compassionate people too. A growing number of American hunters are donating part of their bounty each year to people who need it most, the poor and the homeless, through nationwide campaigns like Hunters for the Hungry, which delivers game meat to local food banks and shelters. In Georgia, where the group was founded 15 years ago, more than 1,000 hunters delivered 5,000 pounds of meat in 2006, making 25,000 meals. Nationwide, the group is on track to deliver its one-millionth meal in December."

Let's look at these crucial opening sentences:

Hunting may seem a cruel and heartless activity to animal-rights activists and many Americans. The author uses two adjectives - "cruel and heartless" gives her two bites at the apple, reinforcing the wickedness of hunters. Ending with "...and many Americans" reinforces an impression that this is the majority opinion, implying without saying "most".

But hunters are trying to show they can be compassionate people too. Too? Why "too"? Meaning hunters can be compassionate alongside being "cruel and heartless" or meaning that hunters can try to approach the compassion levels of "animal-rights activists and many Americans"? And "trying to show" implies that they haven't succeeded - that the jury is still out. One gets the image of cruel, heartless hunters engaged in some clever scheme to slap compassionate-looking whitewash on their underlying evil.

The article goes on to give the animal-rightists yet another crack at the hunters, but at this point the damage has been done. There can be little doubt that the author is leaning personally towards the "cruel and heartless" angle - and seems to be struggling to bring a biased person's impression of "balance" to the piece, through a sort of rote he-said/she-said formula.

Writing like this makes me glad I don't subscribe to TIME any more.

Lieberman condemns Democrats' far left

Lieberman: profoundly wrong:

"…there is something profoundly wrong—something that should trouble all of us—when we have elected Democratic officials who seem more worried about how the Bush administration might respond to Iran’s murder of our troops, than about the fact that Iran is murdering our troops.

"There is likewise something profoundly wrong when we see candidates who are willing to pander to this politically paranoid, hyper-partisan sentiment in the Democratic base—even if it sends a message of weakness and division to the Iranian regime."

I blame Bush for having started the partisan divide on the war in Iraq, but I blame its depth and intensity on these Democrats that Lieberman so courageously identifies - they hate Bush more than they love their own country.

The Presidential Leadership Project - Blogging for President

The Presidential Leadership Project - Blogging for President is a post by Jim Kouzes discussing his research (with Barry Posner) about what people say (or claim) they want in a leader.

As Kouzes puts it:

For people to follow someone willingly, the majority of constituents believe the leader must be

* Honest
* Forward-looking
* Inspiring
* Competent
Taken by themselves, these four characteristics are useful. Write them down and take them into the polling booth with you. Put them next to the names and then vote. But what is more significant is what these qualities mean when taken as a whole. Three of these four key characteristics—honest, competent, and inspiring—make up what communications experts refer to as “source credibility.” More than anything, people want leaders in whom they can believe. Credibility is the foundation of leadership. Period. Full stop. Put another way, if you don’t believe in the messenger, you won’t believe the message.

My only quibble with this is, it's what people say they do, which often differs from what people actually do. (Everybody says they want more mass transit - just not for themselves. They want the other drivers to take it and get off the road.)

Waterboarding and Hiroshima

Waterboarding and Hiroshima - Did the Allies in World War II "lower themselves to the level of their enemies"?

Bret Stephens looks at the tough choices war imposes - to perform evil acts (waterboarding, bombing civilians) in order to accomplish better ends (vastly reducing total casualties). A good discussion that leaves the wishful thinking of Barack Obama and Hillary Clinton looking childish.

Oh, that's right - there's no amount of innocent blood that a good Leftist wouldn't shed, to coddle the guilty.

Why actors and models love to hang out with Hugo Chavez

Why actors and models love to hang out with Hugo Chavez. - By Anne Applebaum - Slate Magazine

Applebaum captures beautifully this ugly facet of Hollywood-style leftist narcissism - the horrid willingness by infantile actors and the like to embrace a thug in order to make themselves feel good.

The comparison to John Reed and the Bolshevik Revolution is inspired.

Podcast on Socially Responsible Investing

This podcast pod-wsjcui.mp3 (audio/mpeg Object) covers many of the pros and cons of "ESG" - Environment, Social, and Governance - investing, or what used to be called just "Socially Responsible" investing.

Unlike vapid terms such as "Social Justice" where the word "social" negates whatever follows it[1], there's some potential upside, logic and sense in at least some forms of ESG or Socially Responsible Investing.

Listen to the podcast - the interview subject has a bit of an accent, but is clearly very sharp and informed. Great content.

Mark Abrams doesn't understand capitalism

The otherwise reasonably intelligent lefty radio host Marc Abrams (Kremer and Abrams on KXL AM-750, Sundays 9 to 11 am) blew it today big-time.

Oh, you people who think the private sector is better are so wrong, Abrams crowed. Yet look at Merrill Lynch - they let their chairman and chief executive, Stan O'Neal, go - and paid him $161 million after the guy lost them $8.4 billion.

Here are some of the ways Abrams gets this wrong:

1. Nobody said capitalism was error-free, any more than government is error free. That's a straw man argument. The real difference lies in things like, how are errors handled? What are the incentives? Whose money is it, and who makes the decisions? In this case, the guy responsible for blowing it was canned. He won't be around to continue to make mistakes for the next 4 or 8 or 20 years. Compare that to say Oregon DMV where a Director can blow $88 million and get a promotion. Notice how many of these examples - 10 of 13 - are from government (look under "Notable Project Failures").

2. Paying O'Neal $161 million to leave was some sort of sweet deal - he should have been kicked to the curb. Whose money was it? Private money - not taxpayer money. If you don't want your money used that way, don't own Merrill Lynch shares. It's not yet clear from the news reports if the $161 million is what his contract calls for as his severance.

3. Yes O'Neal lost the firm $8.4 billion this year. Over the last two years he made them $12 billion, and increased the firm's cash by $17 billion. He did that by risking private capital, not taxpayer dollars. By creating wealth.

Find me the government program that creates that kind of wealth, without risking tax dollars, and that actually holds people responsible for performance, and I'll start to think maybe the government is coming close to being as good as the private, capitalist sector at being efficient and effective. Until then, you can go stand in a DMV line.

OpinionJournal - Amazonian Swindle

Daryl Hannah goes to Ecuador and gets in over her head.

In the latest installment of Liberal Myopia meets Opportunistic Plaintiff's Lawyers, we see a capitalist entity being sued for the crimes of a different, state-owned entity, and the wacky left doesn't care about the facts.

Once again, the "narrative" is more important to self-indulgent, emotionally driven eco-greenies than facts, data, or reality.

Junk like this makes it impossible to work towards a truly cleaner environment. You can't partner with irrational people and make progress.